Andy Kessler

Media 2.Uh-Oh in a single file

 

Here is the entire Media 2.Uh-Oh series in a single file.

Media 2.Uh-Oh Part 4: Go Wide

Here is Part 4, the final piece in the series, the others are here:
Intro
Part 1: Pipe
Part 2: Layer Cake
Part 3: Virtual Pipes

So what is a Media Mogul to do? They control pipes in a world of zero margin costs. It costs virtually zero to sell one more digital song, or run one more digital ad or post one more digital classified. As chips and bandwidth get cheap, digital distribution crumbles the quaint old days.

Media 2.Uh-Oh Part 3: Virtual Pipes

Intro
Part 1: Pipe
Part 2: Layer Cake

Yup, Media is about controlling pipes and Technology is (now) about horizontal layers, and on the Web, with all those packets whizzing around like bumper cars, there are no natural end to end pipes to be found. So, can you construct a virtual pipe and actually create a media company on the Internet?

Media 2.Uh-Oh Part 2: Layer Cake

Intro
Part 1: Pipe

I had a college roommate, Franz, who after taking business classes would come back to our house, pound a few beers, proclaim, “Dude, when in doubt, get horizontal” ­and then proceed to pass out in front of the TV. (I still can't believe Forbes let me write this back in 1998!)

The point I was making is that both the computer and communications businesses have transformed over the last 20 years from a vertically integrated business to a horizontal layer cake. 

This may provide a clue as to what will happen with the (mostly) vertically integrated media mess.

Media 2.Uh-Oh Part 1: Pipe

With all this talk of new media, web media, Google as a media company (read the intro to this series) - it's time to go back to basics. According to answers.com, media is defined as:

me·di·a - Channels of communication that serve many diverse functions, such as offering a variety of entertainment with either mass or specialized appeal, communicating news and information, or displaying advertising messages.

That's pretty lame. Even Katie Couric is confused. Like the elephant and the seven blind guys, some think of media as content, others as distribution, aggregating viewers attention, user generated content, ad sales, keepers of our culture, public trust and on and on. How can you lump TV, radio, movies, newspapers, music, cellphones, cable, satellite into one phrase?

My definition is quite simple: Media is about control of a pipe.

Media 2.Uh-Oh: Intro

There is always hidden meaning to deals - the Google-YouTube deal is no exception. Why YouTube sold is pretty easy - $1.65 billion ain't bad for 20 months work and it would have taken at least $50-100 million from Sequoia Capital, their venture backers, to build the infrastructure and salesforce to build a real company. That's real money.

But what about Google? Why do it?